Transcript Franklin D. Roosevelt and the New Deal

Franklin D. Roosevelt
and the New Deal
Redefined Democracy:
Political Rights  Economic
Security  Social Justice
Causes of the Great Depression
 Agricultural
overproduction
 Industrial overproduction
 Unequal distribution of
wealth
 Over-extension of credit
 International economic
situation
How Herbert Hoover Dealt with the Crisis
 He played the game of
confidence economics
and just kept saying:
“Prosperity is right
around the corner.”
Voluntary Measures
 Hoover eventually established two
privately-funded organizations:
 The National Credit Association
provided $1/2 billion to businesses
for emergency loans, but it was too
under-funded to do much good.
 The Organization for
Unemployment Relief was a
clearing house for relief agencies.
However, state and local
governments were already in too
much debt to benefit from it.
Limited Government Intervention
 In the end, Hoover resorted to
government intervention:
 The Reconstruction Finance Corp
gave $1-1/2 billion in federal loans to
banks, insurance companies, and
industry to prevent bankruptcies, but
it was too little, too late.
 The Home Loan Bank Act provided
federal loans to homeowners to
prevent foreclosures, but got bogged
down in red tape.
Reasons for Ineffectiveness
 Hoover thought
business should be
self-regulating.
 He had a mania for
a balanced budget.
 He lacked political
finesse.
Franklin D. Roosevelt’s Appeal
 In 1932 presidential
election, FDR was
perceived as a man of
action.
 Hoover was viewed as a
“do-nothing president.”
 Norman Thomas, the
Socialist candidate, was
viewed as a radical.
 Results: a landslide for
Democrats and a mandate
to use government as an
agency for human welfare.
Situation When FDR Entered Office
 In March 1933, the
country was virtually
leaderless and the
banking system had
collapsed.
FDR Restored Confidence
 In his inaugural address,
he said “The only thing
we have to fear is fear
itself….”
 He promised vigorous
leadership and bold
action, called for
discipline and
cooperation, expressed
his faith in democracy,
and asked for divine
protection and guidance.
FDR’s Personal Qualities
 He was a practical politician
who practiced the art of the
possible.
 He was a charismatic person
who exhibited a warmth and
understanding of people.
 He knew how to handle press
by focusing attention on
Washington.
 He provided dynamic
leadership in a time of crisis.
 He was willing to experiment
Purposes of the New Deal
 Relief: to provide jobs for the
unemployed and to protect
farmers from foreclosure
 Recovery: to get the economy
back into high gear, “priming
the pump”
 Reform: To regulate banks, to
abolish child labor, and to
conserve farm lands
 Overall objective: to save
capitalism
Sources of New Deal Ideas
 Brains Trust: specialists and
experts, mostly college
professors, idea men
 New Economists: government
spending, deficit spending and
public works, government
should prime economic pump
 Roosevelt Cabinet: included
conservatives, liberals,
Democrats, Republicans,
inflationists, anti-inflationists -often conflicting, compromising,
blending ideas
First New Deal (1933-1934)
 Emphasis: reform
 Primary aim: economic recovery
 Philosophy: economic
nationalism and economic
scarcity (i.e., raise prices by
creating the illusion of scarcity)
 Objectives: higher prices for
agriculture and business
 Beneficiaries: big business and
agricultural business
FDIC
 Federal Deposit Insurance Corporation
 Guaranteed individual bank deposits up to
$5,000
 Protected individuals’ savings
 successful
SEC
 Securities and Exchange Commission
 Regulated the stock market
 Placed strict limits on speculative prices
that led to Wall Street Crash
 Still around today to investigate unfair
business practices
First Agricultural Adjustment Act (AAA)
 Purpose: the recovery of
agriculture
 Paid farmers who agreed
to reduce production of
basic crops such as
cotton, wheat, tobacco,
hogs, and corn
 Was declared
unconstitutional; revised
and used as an example
for government subsidies
today
Civilian Conservation Corp (CCC)
 Purpose: relief
 Gave outdoor work to
unemployed men
between the ages of 17
and 29
 They received $30 per
month, but $22 went
back to the family
 Very successful; set up
roads, established parks
etc.
Federal Emergency Relief Admin (FERA)
 Purpose: relief
 Gave money to states
and municipalities so
they could distribute
money, clothing, and
food to the
unemployed
 Helped some but did
not permanently raise
living standards
CWA
 Civil Works Administration
 Added to the Public Works Administration
 Hired laborers for temporary construction
projects sponsored by the federal
government
 Temporarily employed 4 million people
through winter
National Recovery Act (NRA)
 Purpose: recovery of
industry
 Created a partnership of
business, labor, and
government to attack the
depression with such
measures as price controls,
high wages, and codes of
fair competition
 Eventually declared
unconstitutional
TVA
 Tennessee Valley Authority
 Hired thousands of people to work in nation’s
poorest area, the Tennessee Valley
 Built dams, operated electric power plants, control
flooding and erosion, manufactured fertilizer
 Sold electricity at lower rates than previous
companies
 Set an example of how to modernize other agrarian
areas
HOLC
 Home Owners Loan Corporation
 Provided refinancing of small homes to
prevent foreclosure
 Helped temporarily
Second New Deal (1934-1941)
 Emphasis: reform
 Political Position: liberal
 Primary aim: permanent
reform
 Philosophy: international
economic cooperation and
economic abundance
 Objectives: increased
purchasing power and social
security for public
 Beneficiaries: small farmers
and labor
Works Progress Administration
 WPA
 Much larger relief agency
 Employed 3.4 million men and women who
constructed bridges, roads, airports, and
public buildings
 Unemployed writers, artists, and actors
were paid to paint murals, write histories,
and perform in plays
National Labor Relations Act
 Purpose: reform
 Put restraints on
employers and set
up a National Labor
Relations Board to
protect the rights of
organized labor to
bargain collectively
with employers.
FLSA
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Fair Labor Standards Act
Introduced 40 hour work week
Established national minumum wage
Guaranteed “time-and-a-half” pay for
overtime
 Prohibited employment of minors
 Very successful
Social Security Act
 Purpose: reform
 Gave money to states
for aid to dependent
children, established
unemployment
insurance through
payroll deduction, set
up old-age pensions
for retirees.
U.S. Housing Authority
 Purpose: recovery
and reform
 Used federal funds
to tear down slums
and construct better
housing.
Second Agricultural Adjustment Act
 Purpose: recovery
for agriculture
 Paid farmers for
conservation
practices, but only
if they restricted
production of staple
crops.
Resettlement Administration
 RA
 Gave loans to sharecroppers, tenants, and
small farmers
 Established federal camp where migrant
workers could get housing
The New Deal on Trial
 By 1935, political
disunity was
evident. There were
critics on the right
and the left.
NEW
DEAL
Criticisms of Conservative Opponents
 Conservative opponents said the New Deal went too far:
 It was socialism (killed individualism)
 It added to the national debt ($35 billion)
 It wasted money on relief and encouraged idleness
 It violated the constitution & states rights
 It increased the power of the
Presidency (FDR was reaching
toward dictatorship, Congress a
rubber stamp, independence
of judiciary threatened,
separation of powers shattered)
Anti-New Deal Organization
 Conservative opponents
to the New Deal had an
organization called the
American Liberty
League. They had
money but were small in
numbers, so FDR was
not worried.
Criticisms of Radical Opponents
 Radical opponents
said the New Deal
did not go far
enough. They were
demagogues (rabblerousers) and had
popular followings,
so FDR was
concerned.
Senator Huey Long (LA)
 Senator Huey Long said
New Deal relief measures
were mere crumbs and
advocated a share the
wealth plan (i.e., a
guaranteed annual income
of at least $5,000 for
every American, financed
by confiscating wealth of
people who made over $5
million per year).
Father Charles E. Coughlin
 Father Charles Coughlin was
a rabble-rousing radio priest
from Detroit. His broadcasts
were called the “Golden Hour
of the Little Flower.” He
claimed there was an
international bankers
conspiracy and Jews were
responsible. He advocated
nationalization of banking and
currency and national
resources and demanded a
“living wage.”
Dr. Francis E. Townsend
 Dr. Francis E. Townsend
was an elderly physician
from CA. He had a plan for
the federal government to
pay $200 per month to
unemployed people over 60.
The program would be
financed by a 2% national
sales tax and each pensioner
would be required to spend
the money in 30 days. This
would stimulate the
economy.
Moderate Legislation
 FDR sponsored moderate legislation to silence radical
opposition:
 Revenue Act of 1935 – Response to Huey Long.
Increased taxes on large incomes and corporations.
 Banking Act of 1935 – Response to Coughlin.
Extended federal control
over private banking practices.
 Social Security Act of 1935
Response to Townsend.
Included provisions for
unemployables (dependent children, the disabled,
blind), unemployment insurance, and old-age pensions.
The Election of 1936
 The Election of 1936:
 Made the Democratic
party the majority party
 Created a new Democratic
coalition composed of
both traditional elements
and new elements
 Showed that the American
people rejected radical
solutions to depression
The Roosevelt Coalition
 While Republicans were
still relying on their
traditional base of political
support (big business, big
farmers, and conservatives),
Democrats broadened their
constituency by appealing
to small farmers in the
Midwest, urban political
bosses, ethnic blue collar
workers, Jews, intellectuals,
and African Americans.
Protection of New Deal Accomplishments
 Steps FDR took to protect New Deal
accomplishments (both failed):
 Court-Packing Plan (proposed
increasing Supreme Court from 9
to 15 members, caused in revolt
in Dem. Party)
 Purge of the Democratic Party in
the Election of 1938 (came out
strongly in favor of liberal Dem.
Candidates, evidence that he
interfered in a state campaign,
Republicans gained strength in
both houses of Congress)
Decline of New Deal Reform after 1937
 Reasons for decline of New Deal reform after 1937:
 Court-packing plan made Congress irritable.
 Recession of 1937-38 weakened confidence in New
Deal measures. Republicans gained strength in both
houses.
 Attempted purge of Democratic party failed.
 Conservative Democrats were elected to office.
Resentful of attempted party purge, they joined ranks
with Republicans to block New Deal legislation.
 Increasing focus on foreign affairs.
LIFE DURING THE
DEPRESSION
Women
 Women sought work to help ends meet
 Percentage in total labor force increased
 Women still received lower pay
Dust Bowl
 Severe drought ruined Great Plains crops
 Poor farming practices coupled with high
winds blew away millions of tons of dried
topsoil
 Many sought other work
Dust Bowl
African Americans
 Last hired, first fired
 Higher unemployment than national
average
 Lynchings continued
 FDR did not help much
 Some African Americans found jobs
 FDR appointed some to positions in federal
departments
 Executive order in 1941 established
committee to help African Americans find
Native Americans
 Indian Reorganization (Wheeler-Howard)
Act (1934)
 Repealed the Dawes Act
 Returned lands to Native Americans
 Supported preservation of Native American
culture
Mexican Americans
 Many returned to Mexico because white
migrant workers took their jobs
The Significance of
the New Deal
Physical Rehabilitation of Country
 Attacked soil erosion
 Built dams and planted trees
to prevent floods
 Reclaimed the grasslands of
the Great Plains
 Developed water power
resources
 Encouraged regional
reconstruction projects like
the TVA and Columbia River
project
Human Rehabilitation
 Established the principle
that government has
responsibility for the
health, welfare, and
security, as well as the
protection and education
of its citizens
 Embraced social security,
public health, housing
 Entered the domain of
agriculture and labor
Revitalization of Politics
 Strengthened executive
branch
 Reasserted presidential
leadership
 Revitalized political
party as a vehicle for
the popular will and as
an instrument for
effective action.
Extension of Democracy
 Redefined the concept
of democracy so that it
included not only
political rights but
economic security and
social justice as well.
Maintenance of a Democratic System
 The New Deal maintained a
democratic system of government
and society in a world threatened by
totalitarianism.
 Increased size and scope of
government to meet needs of the
depression
 Provided the leadership that
enabled Congress to put through
the necessary relief, recovery, and
reform measures.
 Sponsored moderate legislation to
neutralize the popularity of radical
opponents